Times are good for the men and women who run Arizona's public companies. In some ways, they've never been better.

Propelled by a healthy economy, a strong stock market and rising corporate profitability, the chief executive officers of the 35 largest Arizona-based companies earned a median $4.79 million last year, according to an analysis by The Arizona Republic.

That's up from $3.26 million in 2016 and easily the highest statewide compensation total ever.

CEO pay totals are among the most visible signs of income inequality around the nation. Next year's numbers could be even larger given that the pro-business corporate income-tax changes adopted late last year in Washington, D.C., haven't yet been fully reflected in company financial results.

The 47 percent rise in Arizona CEO compensation in 2017 compares with a 4 percent increase for Arizonans overall, as reported by the Bureau of Economic Analysis.

Wages in the Phoenix area, where nearly all of the state's larger companies are headquartered, averaged around $49,500 in 2017, according to Bureau of Labor Statistics.

CEO compensation also dwarfs the pay earned by workers at their companies.

Public corporations, for the first time, now are required to compare what their top executives earn in relation to median or midpoint pay for their workers. The typical Arizona CEO earned 80 times more than the median worker pay last year.

That figure was bloated by companies with large foreign work forces, especially in lower-wage Asian nations.

How CEOs are compensated

Pay for Arizona CEOs reflect several components.

These include salaries, bonuses, pension contributions, incentive pay and other retirement contributions; perks like company-provided cars and health insurance; and, in a few cases, personal use of company aircraft and country-club dues. (The results also include pay for a handful of chairmen at those companies that split the CEO and chair positions.)

But the biggest compensation numbers often come from exercised or cashed-in stock options and restricted stock awards that vest or formally become an executive's assets. This sometimes occurs when top executives leave their companies, voluntarily or not.

For example, GoDaddy's former CEO, Blake Irving, last year outearned his replacement, Scott Wagner, owing largely to option exercises. So too for Avnet's outgoing CEO, Richard Hamada, compared with his replacement, William Amelio.

Irving's compensation of roughly $18.3 million was second highest in Arizona last year, trailing only that of Donald Slager, CEO of trash hauler Republic Services at $25.7 million.

Republic Services CEO Donald Slager(Photo: Republic Services Inc.)

Keith Jackson of ON Semiconductor placed third at $17.7 million, followed by Brian Mueller of Grand Canyon Education ($16.8 million) and Donald Brandt of Pinnacle West Capital, parent of utility Arizona Public Service ($15.2 million).

These and various other CEOs cited in this article either didn't respond to or declined requests for comment through their media-relations departments.

However, Sara Dial, lead independent director at Grand Canyon Education, issued a statement indicating the board regularly reviews the compensation of senior executives to those at peer companies, with Mueller's pay regularly falling in the bottom 25 percent or quartile. Mueller's compensation over the past two years reflects options that were set to expire in 2018 and thus had to be exercised, she added.

Company shareholders "have received a return on their investment only because investors see value in what has been created at the university, which is reflected in the significant increases in the stock price during the past 10 years," Dial said. "Brian’s additional compensation during the past two years is a result of those changes in the stock price."

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How The Republic calculated pay

While the figures include options that were exercised and stock awards that vested last year, those components are not reported in a standardized pay disclosure that companies must make once a year, in what is called the Summary Compensation Table.

The Republic's analysis includes both figures for each executive — pay as reported in the Summary table and adjusted for any cashed-in options and vested stock awards.

As part of the adjustment, the value of recent options grants and stock awards that haven't yet been cashed in, or which haven't yet vested, are subtracted. Otherwise, there would be double counting of these components.

As an example, Richard Adkerson of Freeport-McMoRan had the highest Arizona CEO pay based solely on numbers in the Summary Compensation Table, at $18.4 million. But nearly all of this was in current-year, unrealized option grants and stock awards.

Because he didn't exercise options or had any awards vest last year, his adjusted pay figure was much lower, at $7.2 million.

Nationally, CEO pay at more than 300 of the nation's largest companies reached a median $11.7 million, according to a study by the Associated Press and Equilar that was based on numbers in company Summary Compensation Tables.

That was up 8.5 percent from the prior year, reflecting strong profit increases and stock-market gains last year.

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A typical Arizona CEO makes about $80 for each dollar earned by workers, a difference of about 8,000 percent, according to an analysis by The Arizona Republic of financial records at 29 of the largest companies in the state. However, pay ratios varied widely from one company to the next, from roughly double to more than 900 times higher. John Severson/The Republic

52 non-CEOs earn big, too

Many other Arizona executives cashed in big last year — not just CEOs and chairmen.

Some 52 Arizona chief operating officers, senior vice presidents, general counsels and the like had compensation of at least $2 million in 2017, up from 47 in 2016.W. Stan Meyer, chief operating officer at Grand Canyon Education, led this category last year with pay totaling $10.6 million.

Arizona's executive-pay numbers might have been higher if not for changes that culled the number of large public corporations based in the state.

For example, Apollo Education Group, which operates the University of Phoenix, was acquired by a private-equity company and no longer reports pay for its executives.

Western Refining also was acquired, while Starwood Colony Homes merged with another company and relocated its headquarters to Texas. Swift Transportation merged with fellow trucker Knight Transportation to form Knight-Swift Transportation Holdings,still based in Phoenix.

Executive pay typically is tied to several, if not dozens, of measures, including profitability, cash flow, revenue and stock-price performance. With the economy humming, more than 80 percent of Arizona's larger public companies were profitable in 2017, and more than four in five had rising stock prices.

Pay also tends to correlate with company size.

Copper miner Freeport-McMoran, Republic Services and semiconductor maker Microchip Technology rank as the three most valuable Arizona corporations based on the value of their shares in the stock market.

They're also the state's three most profitable companies, and their CEOs tend to rank near the top of the pay charts.

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Shareholders OK with pay

As noted, CEO pay tallies, especially at the nation's largest companies, are one of the most visible signs of the rich-poor gap in the U.S.

Corporate directors — the men and women who sit on company boards — set pay policies for top executives. Many are current or former CEOs themselves.

Yet shareholders have an opportunity to provide feedback in periodic, non-binding "say on pay" votes, and most of these measures pass with overwhelming support.

Nationally, shareholders at just 2.6 percent of companies — and none in Arizona — rejected their companies' CEO pay plans so far this year, according to a tally by Semler Brossy, an executive-compensation consulting firm.

As lofty as executive pay was in 2017, the numbers seem destined to keep rising thanks in part to corporate income-tax changes adopted late last year.

In general, the cut in federal corporate tax rates and other factors will give a boost to company profits and cash flow, and that could provide a lift to CEO pay for years to come.